Businesses should follow a guide to hiring internationally to find success in a new market. Finding high-quality employees overseas is imperative for sustainable growth and direct insight into the consumer base. Plus, new countries present opportunities for innovation.
Working with a current labor force is exciting and opens up the untapped potential for growth. For example, in France, more than half of the population is of working age. Of that population, nearly one-third has an advanced education. When you enter a market like France, you can hire directly from that labor force once you’ve established a legal presence.
Guide to Hiring Internationally: Methods
There is not a one-size-fits-all approach to hiring overseas. Your business is unique. You have different needs than your competitors, and you have different needs dependent upon which country you choose.
As for your methods to hiring internationally, options include:
- Establishing a Foreign Subsidiary.
- This option is the largest commitment to global hiring. It’s the formation of a legal entity in your new country, and your parent company controls the ownership of more than 50% of the voting stock. Your parent company is typically the US-based headquarters. Typically, a foreign subsidiary costs around $20K USD to set up has significant maintenance fees and takes about four months to set up. It’s also difficult to tear down and get out of the country if your business fails to succeed. Not all firms need to do this, so work with an expert to determine if this option is necessary.
- Working with independent contractors.
- Another risky option, working with foreign independent contractors may work for your business if you aren’t ready to commit to a full employee. If you move forward with contractors, work with an in-country expert to establish an agreement. It should fit the needs of your new country, cover IP protection and clearly state autonomy. Just know, there are risks involved with contractors, which are laid out in this post.
- Outsourcing individuals business processes.
- International Business Process Outsourcing (BPO) is ideal for companies that want to outsource tasks like customer service and do not mind giving up control. BPO is a third-party provider that manages business processes completely. It helps you focus on strategy, but as mentioned, you will not have direct control of that outsourced process.
- Employer of record services keep your company compliant.
- EOR services such as International Professional Employer Organization (PEO) and Foreign Subsidiary as a Service (FSaaS) are third-party companies that manage your international employees in your new country on your behalf. Benefits include management of all of payroll, entitlements, withholdings, and taxes. Your company is responsible for day-to-day management of responsibilities and employee liabilities, and the EOR keeps you compliant. Plus, you’ll have a legal entity without establishing a burdensome subsidiary.
Guide to Hiring Internationally: Attracting Talent
Now that you know the logistics of how to hire, you need to develop a plan on how to attract talent. You will find that it’s competitive in many international markets. As more and more businesses start to expand overseas, whether for opportunity or lower corporate tax rates, the global talent pool becomes smaller and smaller.
In this guide to hiring internationally, it’s also important to understand how to attract the best team members to your business.
- Assist with visas and work permits. If you’re working with expats, make their lives easier by helping them obtain their work permit. Providing an offer is one of the requirements for getting a permit, but you can go the extra mile by walking them through the entire process. An EOR service can help you navigate the work permit process.
- Provide competitive benefits. Research your competition and find out what types of benefit and compensation packages they are offering recruits. If you have the resources, provide better options.
- Retain talent. You did all of the hard work recruiting and hiring talent, not it’s time to retain them. When you eliminate culture and language barriers and align your corporate values to your foreign entity, this will keep morale alive and well.
We have a team of experts that work in more than 185 countries. Velocity Global focuses on hiring internationally. If this is an area of concern for your business as you start global growth, contact us today!